Europe
Brexit may not lead to ‘new dominant location’ for European finance – Irish governor
Regulatory considerations should not drive firms’ location decisions, Lane argues
EBA recommends tighter regulation of European banks’ ‘large exposures’
Report calls for stricter limits on bank exposure to single clients and cautions against premature application of “standardised approach” to large exposures
ECB issues latest macro-prudential bulletin
Papers look at second order effects of financial shock, de-risking and high-frequency trades
Systemically important investment firms should come under CRR and CRD-IV, EBA says
European Banking Authority calls on regulators to re-examine guidelines for identifying most important investment firms
Draghi postpones decision on extension of QE
ECB president is aiming to build governing council support for further asset purchases, one analyst argues
Output gap in euro area is much larger than official estimates – paper
Official estimates predict output gap 3–4% less negative than author’s results; current models do not “adequately capture” inflation developments
Bank of Spain paper explores links between fiscal consolidation and private deleveraging
Larger and faster fiscal consolidations have greater impact on output, authors argue
ECB’s Mersch: central banks have failed to correctly assess growth potential
Central banks were “over-reliant on pro-cyclical forecasts” before the financial crisis, ECB board member says; repeats call for fiscal stimulus and structural reform
Belgian paper studies work of pioneer of regional economics
Robert Triffin was the “architect” of the European Payments Union
Paper examines effects of financial crisis on European long-term debt issuance
Bank of Spain paper uses large database on most frequent issuers of long-term debt
Esma says regulators should wait before imposing quantitative SFT haircut triggers
Decision on policy change should wait until 2018, authority says; chairman says “sheer size” of market makes transparency important
Mersch says eurozone deposit rates are only ‘mildly’ negative
ECB board member says rates can be “mildly” but not “wildly” negative before costs outweigh benefits; calls for faster progress on banking union
Draghi defends ECB policy to German lawmakers
Monetary policy not causing low profitability at some German banks, ECB president says; calls on policy-makers to initiate structural reforms
EBA default standards could prove ‘burdensome’, banks warn
Implementation likely to be costly, especially for IRB-based firms, authority admits; standardisation necessary in view of wide range of current practices
Non-banks’ asset purchases should be capped, paper argues
Researcher puts forward model of impact on economy of secondary market trading
Crane invests $100 million in new banknote plant
New banknote facility in Malta to add to existing operations in Sweden and the US, employing 200 people
New model shows eurozone output gap remains large, researchers argue
Other models fail to capture interplay of inflation and output, paper says
Eurozone employment-to-GDP-growth ratio has recovered strongly – ECB
Employment growth concentrated in Spain and Germany; productivity remains “stagnant at pre-crisis levels”
Obituary: Carlo Azeglio Ciampi
Former Bank of Italy governor dies aged 95. The former partisan also held the roles of finance minister, prime minister and president
Wage Phillips curves in eurozone steepened after 2008 – paper
Germany was the exception among major eurozone economies, Bank of Italy paper argues
ECB consults on bad debt guidance
ECB “strongly encourages” the use of the European Banking Authority’s definition of non-performing exposures, but does not impose its own single measure for the eurozone
Working paper examines interactions between credit defaults and monetary policy
Countercyclical capital buffers can lessen macroeconomic fluctuations but increase the length of slumps, author argues; bank recapitalisation “overcomes this trade-off”
King calls for IMF revamp
Former BoE governor suggests replacing IMF’s executive board with International Monetary and Financial Committee; notes fund may have strayed too far into political territory
Unconventional monetary policy should be supported on structural and fiscal fronts – ECB paper
Authors examine the effects of supply- and demand-side policies; results point to “positive synergies” between policies